House as a capital investment: approach of calculated rental income for new construction?

I want to build a new property as an investment purely for rental purposes. The financing should and will be able to refinance itself exclusively through rental income.

Does anyone know or have experience with how banks take calculated rental income into account for financing? Are there risk discounts compared to wage income?

The location of the property would be the immediate Berlin suburbs. So full rental occupancy is certain and no political risk regarding a possible rent cap or similar.

Thank you very much for your answers

Ziegenhals

Does anyone know or have experience with how banks factor in calculated rental income for financing? Are there risk discounts compared to wage income?

As a rule, 80% of the net cold rent is considered as income. 20% are operating costs. This increases your income and, on the other hand, also the standard living expense allowance.

So full rental certainty and no political risk regarding a possible rent cap or similar.

LOL and ROFL
Ever looked into the Green Party's program (brutal cap like from the Nazi era or the GDR – the rent index is to be determined from the last 20 years, which would lead to statutory rent reductions for many). Or the Reds with their federal rent cap? Just wait for the election and let's talk again.

I want to build a new building exclusively as a capital investment for rental purposes.

What kind of property?

Thank you very much for your response. Cold rent for the bank would then be the currently achievable market rent? Or are flat rates used instead (like the rent index, which, however, is not available for the location)? The 20% deduction then takes into account the rental default risk and calculated maintenance costs?

The property would only be a semi-detached house. I know, not optimal for renting. But more is not possible on the plot. And it has now been lying there for years with a current value of around half a million without any ground rent. I would rather build on it. And I have already realized another semi-detached house for rent. The project has been running with positive cash flow from day one. However, the financing application back then was based on my income and not on calculated rental income.

Cold rent would then be the rent currently achievable on the market for the bank?

Yep.

The discount of 20% then takes into account the risk of rent default and calculated maintenance costs?

Yep. And further non-allocable operating costs. For example, a management company could also be involved.

But nothing more is possible on the property. And it has now been lying around for years with a value of about half a million without any ground rent. I’d rather build on it.

I’m throwing two more possibilities into the room. Sell the property and invest in a used apartment building. Alternatively, make a hereditary building right out of the property. Remain the owner and generate a secure annual return without any risk. The capital investment is zero in this case.